Sex, gender and life insurance

Over time, the topic of gender and sexual identity has become more prominent. Gender equity is an important topic for society, and actuaries and life insurers have a defining role to play in providing a fair and valuable product to all members of the community.

For most people growing up, we have been taught that there are two sexes – male and female, which align with two genders – male and female. However, there is a distinction between the two where:

  • Sex is determined by an individual’s biology; and

  • Gender is determined by an individual’s self-perception.

Therefore, sex and gender are not congruent for some people. For example:

  • Non-binary: individuals who identify as neither male or female, outside the gender binary.

  • Transgender: individuals who identify with a gender that is different to their assigned sex.

The topic of gender and sex is a subject that has become more prominent over time. It is important for actuaries to consider societal trends when developing and pricing insurance contracts that are fair for all members of the community.

Around the world

Since 21 December 2012, insurers within the European Union (EU) and United Kingdom (UK) have been legally required to charge the same premium rates to males and females for the same insurance products without distinction on the grounds of sex. This legal requirement applied to all new insurance contracts, including motor insurance, life insurance and annuities. This decision was made due to the EU’s view that gender equality is a fundamental right.

Within Australia, insurers do not have such restrictions where exemptions exist that allow insurers to differentiate. This is provided that it is based upon actuarial or statistical data on which it is reasonable to rely, and it is reasonable having regard to the matter of the data and other relevant factors. Hence, sex can be used as a rating factor, providing there is statistical evidence to do so. 

In the United States (US), some states such as New Jersey have anti-discrimination laws that explicitly protect transgender individuals from being discriminated against by insurers. On the other hand, some states are not as explicit, which leads to a variety of different treatments of transgender individuals across the US. Examples include[1]:

  • Underwriting applicants as the gender they were born with.


  • Underwriting applicants as whatever gender the applicant applies as.


  • Underwriting applicants as male, but will consider as female if the applicant feels it is more appropriate.


What does the data say?

The 2016 Census counted 1,260 sex and/or gender diverse people in Australia (out of a total of 23,401,890 respondents)[2]. However, this is very likely to be under-reported, as respondents needed to take extra steps and have knowledge of special procedures to report their sex as other than male or female. In the US, it is estimated that 0.6% of adults (1.4 million) identify as transgender[3] and 11% of the US Lesbian, Gay Bisexual, Transgender and Queer (LGBTQ) adult population (1.2 million) identify as non-binary[4].

Despite representing a small proportion of the population, it remains important to understand what studies to date show in regard to the relative health of non-binary and transgender individuals. Asscheman et al. (2011)[5] observed that the mortality of male-to-female (MtF) transgender individuals (males receiving cross-sex hormonal treatment) was 51% higher than the general male population. This was mainly attributed to non-hormone related causes including suicide, AIDs, cardiovascular disease and drug abuse. In female-to-male (FtM) transgender individuals, mortality was not significantly different to that of the general female population. Transgender individuals are also likely to exhibit excess morbidity as mental health disorders are more prevalent[6], which are often due to recurring experiences of negative social interactions and discrimination.

The above observations suggest that the claim risk of transgender (and possibly non-binary) individuals could be different to ‘conventional’ gender risks.

What could be done?

Currently, many group insurance offerings charge unisex premium rates while most retail and direct life insurance products charge premium rates where sex is a rating factor. In situations where gendered premium rates are charged, consideration can be given to the following approaches to avoid discriminating against individuals:

  • Charge the lower of male and female premium rates.

  • Charge the premium rates corresponding to the gender to which an individual identifies with.


It needs to be acknowledged that such potential options create further considerations on the topic of cross-subsidies amongst different risk profiles, and possible risk of individuals selecting a different gender with the intention of accessing lower premium rates.

In terms of underwriting practices, consideration will need to be given to the questions asked. Asking individuals both male and female-specific questions is a possible way to avoid discriminating against people. It is also worth noting that asking gender-specific questions only can expose insurers to risks where the questions asked do not cover all the possible risks related to an individual. For example, an individual assigned as a female at birth with a family history of breast cancer is still at a higher risk for breast cancer even if they identify as a male.


Gender equity is an important topic for society, and life insurers have a prominent role to play in providing a fair and valuable product to all members of the community.

It is essential that life insurers respond in a way that meets community expectations and does not result in individuals feeling discriminated against.

Non-binary and transgender individuals represent a small proportion of the population, such that they would also likely make up a small proportion of the lives insured by insurers. As a result, it is not unreasonable to presume that most insurers can bear the financial impacts of any cross-subsidies introduced by the potential rating options mentioned above. Ultimately, as with all insurance rating decisions, insurers need to understand any differentials in potential risks, and ensure a fair approach, based in statistical evidence, is always adopted.


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